Online retailing might be growing at an exponential rate, but according to a House of Commons briefing paper in 2018, online transactions accounted for only 18% of all retail sales. Our appetite for online shopping is frequently cited as the cause for the latest set of store closures, but what this also highlights is that 82% of retail sales are still happening in-store.
Although consumers are still shopping in bricks-and-mortar stores, enticing them through the doors in the first place is increasingly the challenge. That’s why more retailers are turning to partnerships with other brands to offer something unique in the market that will attract shoppers and help them stay competitive.
Partnerships can drive many benefits
We’ve mainly seen this between retailers with non-competing offerings but it can also extend to those who are direct competitors too. Partnerships can drive many benefits: greater brand awareness, an increase in footfall; and importantly, additional revenue. But importantly, there must be synergy between each of the partnerships, and they should all be mutually beneficial.
One of the latest examples is Primark’s five-storey megastore, which opened in Birmingham in April 2019, where its collaboration with entertainment giant Disney has already been a big draw. The store boasts a Disney-themed café complete with interactive tables and Mickey Mouse-shaped pancakes, and is said to be Disney’s first outside of its resorts and cruise ships. The store also has a dedicated Disney shopping area, making it a real destination for shoppers.
Another example of a headline-grabbing partnership is the unlikely pairing of Forever 21, the American fast fashion retailer, and Honda who recently collaborated on a motocross-inspired branded clothing line in a strategy designed to attract more male consumers into its stores.
Attracting different customer segments
Both of these examples attract shoppers, often new or different customer segments, into stores. Once they’re in store, retailers have an opportunity to encourage them to return again and again.
Many retailers are taking this further and using a combination of experiential shopping and technology to make the store experience more digitally connected, driving further traffic to stores and keeping the high street alive as we discuss in our latest report: A guide to keeping the high street alive.
A more cost-effective use of space
As rental costs continue to rise, including concessions within their retail sites can help retailers make the most out of their available space, helping to increase footfall and by extension, revenue.
Going forward, these partnerships could even include working with competing brands. As more products move online, retailers will be hard-pressed to make the most of their physical space. Large retailers, particularly those with a presence in smaller towns and villages, could also act as delivery hubs for other brands, attracting more (and different segments of) customers into stores.
To survive, retailers need to grow and adapt. Collaboration might just be the way to do this.
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